The purchase and sale of financial securities (i.e., bonds and/or stocks of shares) is not included in calculations of investment spending because ________.

Question

The purchase and sale of financial securities (i.e., bonds and/or stocks of shares)  is not included in calculations of investment spending because ________.

BlackTom AI · Accepted Answer

The prompt asks why the purchase and sale of financial securities is not included in calculations of investment spending. 
Option provided: 'they do not necessarily lead to a change in the amount of output produced in the United States.' This reasoning aligns with standard national income accounting: financial transactions involving the transfer of existing assets (like stocks and bonds) do not directly create or destroy real output or GDP. They mainly redistribute ownership of existing assets and do not correspond to new production of goods and services in the economy, so they are excluded from investment spending. 
Since the other answer options are not present in the provided data, there is nothing to evaluate for potential misconceptions. In typical exams, alternative choices might claim things like 'they increase current production,' 'they reflect spending on capital goods,' or 'they create future demand,' each of which would be incorrect for the same reason: financial trades do not by themselves generate new output or productive capacity.

ECON 304, Section 003: Inmd Macroec Analysis (22511--UP---P-ECON----304-------003-) Quiz 3 (ECON304-SP25)

The purchase and sale of financial securities (i.e., bonds and/or stocks of shares) is not included in calculations of investment spending because ________.

View Explanation

Log in for full answers

Similar Questions

Suppose GDP is $300 million, depreciation is $10 million, net payments to the rest of the world are $30 million, and statistical discrepancy is $8 million. What is the value of national income?

For an economy as a whole,[Fill in the blank]

Which of the following purchases do national income accountants consider to be investment?

Given the information from the table below, the GDP is equal to _____ National Income $50,000 Net Income Payments to Rest of the World $3,000 Consumption of fixed capital $5,000 Statistical discrepancy $1,000

Gross national income consists of GDP plus Blank ______, without including any payments made to those who do not live in the country but who contribute to the domestic economy.

GNP equals GDP income earned domestically by foreigners income that nationals earn abroad.

Assume a closed economy in which GDP is $20 trillion, consumption spending is $16 trillion, and government spending is $2 trillion. If the government imposes taxes of $2 trillion, what is the level of investment spending?

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler

ECON 304, Section 003: Inmd Macroec Analysis (22511--UP---P-ECON----304-------003-) Quiz 3 (ECON304-SP25)

The purchase and sale of financial securities (i.e., bonds and/or stocks of shares) is not included in calculations of investment spending because ________.

View Explanation

Log in for full answers

Similar Questions

Suppose GDP is $300 million, depreciation is $10 million, net payments to the rest of the world are $30 million, and statistical discrepancy is $8 million. What is the value of national income?

For an economy as a whole,[Fill in the blank]

Which of the following purchases do national income accountants consider to be investment?

Given the information from the table below, the GDP is equal to _____ National Income $50,000 Net Income Payments to Rest of the World $3,000 Consumption of fixed capital $5,000 Statistical discrepancy $1,000

Gross national income consists of GDP plus Blank ______, without including any payments made to those who do not live in the country but who contribute to the domestic economy.

GNP equals GDP ______ income earned domestically by foreigners ______ income that nationals earn abroad.

Assume a closed economy in which GDP is $20 trillion, consumption spending is $16 trillion, and government spending is $2 trillion. If the government imposes taxes of $2 trillion, what is the level of investment spending?

More Practical Tools for Students Powered by AI Study Helper

Making Your Study Simpler

GNP equals GDP income earned domestically by foreigners income that nationals earn abroad.